Climate change mitigation policy in Ecuador: Effects of land-use competition and transaction costs

•Results denotes high extent of competition with respect to land use between mitigation options.•The net effect of transaction costs is small and may not represent a critical impediment.•The simulated REDD+ incentive shows how it might positively affect land use in developing countries. This paper d...

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Bibliographic Details
Published in:Land use policy 2019-02, Vol.81, p.302-310
Main Authors: Ortega-Pacheco, Daniel V., Keeler, Andrew G., Jiang, Shiguo
Format: Article
Language:English
Subjects:
Agricultural economics
Agricultural land
Agricultural production
Carbon
Climate change
Climate change mitigation
Climate policy
Competition
Conservation
Conservation payments
Costs
Deforestation
Econometrics
Economic models
Environmental policy
Forest conservation
Forest management
Forestry
Land use
Palm oil
Payments
Transaction costs
Tropical forests
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Summary:•Results denotes high extent of competition with respect to land use between mitigation options.•The net effect of transaction costs is small and may not represent a critical impediment.•The simulated REDD+ incentive shows how it might positively affect land use in developing countries. This paper develops an econometric model to estimate the economic determinants of forest land conversion in Esmeraldas, Ecuador and evaluates the effect that transaction costs have on incentive-based climate change mitigation activities. Using a logistic share model, the results show a high extent of competition for the use of land between agricultural production for palm oil processing and land-based carbon mitigation through avoided emissions from deforestation. Our results show that the current policy of introducing conservation payments in Ecuador is not sufficient to significantly reduce deforestation, but that payment levels based on a plausible international carbon price would make an appreciable difference in the net sequestration contribution of forests in northern Ecuador. Knowledge generated from this research can inform site-specific land use policy design aimed at addressing the opportunity costs of tropical forest conservation as an important component of climate mitigation strategies.
ISSN:0264-8377
1873-5754
DOI:10.1016/j.landusepol.2018.10.015